The Patient Protection and Affordable Care Act has been established by the government in order to protect employers and consumers from unreasonable insurance rate increases. Contributing factors for health insurance providers in determining if a rate is ‘reasonable’ would be:

Medical claims, operations, etc.

Profits

Affordability

After calculating sensible premiums, carriers still have to take competitors’ rates into account, which very well could shift rates in an undesirable direction for customers. If that doesn’t affect the decision, rapidly increasing medical costs will. Plus, the company may be struggling to recover from prior losses. All of these benefactors will without a doubt rack up to a higher rate than before.

The Department of Health and Human Services (HHS) deems rate increases of 10% worthy of state review to determine reasonability. If these rates are then approved, the carrier is required to give customers justification of the change.